Iowa | bigmoe - 1/18/2014 12:48
Treat long term debt just like it is, long term debt. Pay a little extra on your payment if you want but don't take money from your cash flow and try pay it faster. For example, if you have $5k in your checkbook and your payment is $500 a month that is 10 payments. If you don't have a steady income to keep a cash flow, I would save the $5k for 10 payments instead of 1 $5k payment and then wonder how to make next months payment. I hope that makes sense.
Keep long term debt long term and keep short term such as operating loans and credit card debt payed. Its been working well for me. Have had positive net worth change for going on 6 years now.
No, get the bank to add a rider that extra $$ you pay ahead is toward current payments in chronological order- meaning if you're 5000 ahead in your example, you could miss the next 10 payments if needed. Then pay every extra penny you can get your hand on towards debt, and don't miss a payment unless you absolutely have to. Been doing that for 35 years w positive net worth change EVERY year, some of those VERY hard years. KILLED a whale of a lot of interest that way. THAT is how CASH IS KING. IT aint king if you're holding it and you're barely current w your payments--you're robbing Peter to pay Paul, and it's costing you A TON of interest to do it. In that scenario, you don't have cash, just money that is the bank's that you're holding. |
Paying off Long Term Loans? Your Thoughts.
